Will 2020 be the Year of Communicating Cheaply?

13 February 2020

There are positive signs that South Africans will enjoy more affordable mobile data in 2020.

Initiatives by the Competition Commission and the Independent Communications Authority of South Africa (ICASA) to reduce the cost to communicate as well as progress with the assignment of spectrum suitable for mobile data services shouldl lead to price relief for South Africans when buying mobile data in 2020.

The Commission will announce progress in its negotiations with Vodacom and MTN to reduce their tariffs – especially for prepaid data bundles – on or before 2 March 2020. At the same time the Commission will indicate whether it has successfully reached agreement with all of the mobile operators for the provision of a “lifeline” package of free data for prepaid subscribers. The result is likely to be less price relief than the Commission wanted but more than consumers would otherwise have got.

[A table showing the recommendations made by the Commission and the deadlines for implementation is provided in the Annexure to this release.]

Meanwhile, ICASA’s intervention to stop exorbitant out-of-bundle data charges and require providers to roll-over unused data – implemented on 1 March 2019 – has undoubtedly already reduced the cost to communicate. The communications regulator is busy assessing the impact of the new rules following concerns from consumers that they are not being properly implemented.

To this end it has published a questionnaire for providers and consumers, requesting simple information on, for example, whether they have received data usage notifications and whether their unused data has been properly rolled over. Responses must be submitted to ICASA by 16h00 on 18 February 2020.

[Further information and a copy of the questionnaire is available from https://www.icasa.org.za/news/2019/regulatory-impact-assessment-on-end-user-and-subscriber-service-charter-regulations.]

ICASA is also investigating levels of competition in the mobile data market and is proposing to intervene to ensure that new entrants have better access to high sites and that dominant operators are required to enter into localised roaming agreements. This process is only likely to have an impact in 2021.

Finally – and perhaps most importantly – 2020 is likely to see licensees such as Vodacom and MTN obtaining more spectrum which can be used to provide better coverage and better services. The mobile networks have long and publicly stated that they are unable to reduce the cost of mobile data significantly until they receive this spectrum.

The Competition Commission has given notice that it will be keeping a close eye on whether they keep their promises and hopefully bidders for spectrum will not be forced to pay a high reserve price for what they get. A short-term windfall for Treasury will mean that reductions for consumers will be slower to come through.

As our history of high data prices tells us, however, many things can and do go wrong and there is a lot at stake for those in industry and those hoping to be in industry. But there is even more at stake for the country: affordable universal access to communications is a critical component of social and economic futures.

Table showing timelines for implementation of the recommendations made by the Competition Commission